Text of the Medical Debt Relief Act of 2010

This bill was introduced in a previous session of Congress and was passed by the House on September 29, 2010 but was never passed by the Senate. The text of the bill below is as of Sep 28, 2010 (Reported by House Committee).

According to credit evaluators, medical debt collections are more likely to be in dispute, inconsistently reported, and of questionable value in predicting future payment performance because it is atypical and nonpredictive.

(4)

Nevertheless, medical debt that has been completely paid off or settled can significantly damage a consumer’s credit score for years.

(5)

As a result, consumers can be denied credit or pay higher interest rates when buying a home or obtaining a credit card.

(6)

Healthcare providers are increasingly turning to outside collection agencies to help secure payment from patients and this comes at the expense of the consumer because medical debts are not typically reported unless they become assigned to collections.

(7)

In fact, medical bills account for more than half of all non-credit related collection actions reported to consumer credit reporting agencies.

For 2007, 28,000,000 working-age American adults were contacted by a collection agency for unpaid medical bills.

(b)

Purpose

It is the purpose of this Act to exclude from consumer credit reports medical debt that had been characterized as debt in collection for credit reporting purposes and has been fully paid or settled.

3.

Amendments to Fair Credit Reporting Act

(a)

Medical debt defined

Section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a) is amended by adding at the end the following new paragraph:

(y)

Medical debt

The term medical debt means a debt described in section 604(g)(1)(C).

(b)

Exclusion for paid or settled medical debt

Section 605(a) of the Fair Credit Reporting Act (15 U.S.C. 1681c(a)) is amended by adding at the end the following new paragraph:

(7)

Any information related to a fully paid or settled medical debt that had been characterized as debt in collection for credit reporting purposes, which, from the date of payment or settlement, antedates the report by more than 30 calendar days.

.

1.

Short title

This Act may be cited as the Medical Debt Relief Act of 2010.

2.

Findings and Purpose

(a)

Findings

The Congress finds the following:

(1)

Medical debt is unique, and Americans do not choose when accidents happen or when illness strikes.

According to credit evaluators, medical debt collections are more likely to be in dispute, inconsistently reported, and of questionable value in predicting future payment performance because it is atypical and nonpredictive.

(4)

Nevertheless, medical debt that has been completely paid off or settled can significantly damage a consumer’s credit score for years.

(5)

As a result, consumers can be denied credit or pay higher interest rates when buying a home or obtaining a credit card.

(6)

Healthcare providers are increasingly turning to outside collection agencies to help secure payment from patients and this comes at the expense of the consumer because medical debts are not typically reported unless they become assigned to collections.

(7)

In fact, medical bills account for more than half of all non-credit related collection actions reported to consumer credit reporting agencies.

For 2007, 28,000,000 working-age American adults were contacted by a collection agency for unpaid medical bills.

(b)

Purpose

It is the purpose of this Act to exclude from consumer credit reports medical debt that had been characterized as delinquent, charged off, or debt in collection for credit reporting purposes and has been fully paid or settled.

3.

Amendments to Fair Credit Reporting Act

(a)

Medical debt defined

Section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a), as amended by section 1088(a)(1) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Public Law 111–203; 124 Stat. 2086), is amended by adding at the end the following:

(z)

Medical debt

The term medical debt means a debt described in section 604(g)(1)(C).

(b)

Exclusion for paid or settled medical debt

Section 605(a) of the Fair Credit Reporting Act (15 U.S.C. 1681c(a)) is amended by adding at the end the following new paragraph:

(7)

Any information related to a fully paid or settled medical debt that had been characterized as delinquent, charged off, or in collection which, from the date of payment or settlement, antedates the report by more than 45 days.

.

September 28, 2010

Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed